Cabinet greenlights amendment to bring private developers into government housing projects

Good morning, wonderful people. We’re closing out the week with a look at Saudi Arabia’s war-era fiscal cushion, where a single Red Sea pipeline and USD 90 crude are shielding the budget deficit from the worst of the shipping war — though analysts warn this workaround leaves the economy just one chokepoint away from a severe shock.

ALSO- The Public Investment Fund plans to consolidate its homegrown F&B brands under the Milaf Global platform to launch a global export push, Ashmore closes in on a third Riyadh school, and budget carrier flynas navigates war-spiked jet fuel costs in a fresh batch of 2Q earnings.

A quick update before we dive in: The Houthis said they struck two Saudi oil tankers — one off the coast of Yanbu and another in the Gulf of Aden. The Saudi side did not confirm the news. The Iran-backed group threatened to “escalate targeting Saudi oil tankers in the northern Red Sea to close all access points and prevent their passage.”

REMEMBER- The Iran-backed group fired on Abha airports in mid-July and said days later it would impose a blockade on Saudi-linked vessels crossing Bab Al Mandab.

Cabinet unlocks government housing land

The Cabinet approved an amendment allowing private developers to build housing on government land in exchange for ownership of part of that land, state news agency SPA reports. The mechanism: the government contributes planned land, a private developer builds housing with full infrastructure for eligible developmental housing families, and in return the developer receives a percentage of the land, which it can use or sell. The Municipalities and Housing Ministry will issue executive regulations after coordinating with relevant authorities.

The goal is to get idle land moving. Saudi Arabia has significant parcels that have sat undeveloped for years due to financing constraints, Sultan Al Osaimi, a real estate valuation fellow at Taqeem, tells EnterpriseAM. He expects the ownership allocations will likely be determined by the nature and economic value of each project, not by an investor’s desire to acquire land alone.

IN CONTEXT- The amendment builds on a series of real estate reforms aimed at increasing housing supply and cooling prices. Over the past year, Saudi Arabia expanded the white land tax to cover vacant properties, raised fees on idle land up to 10%, and introduced executive regulations for a vacant property tax.

The financing effect: Al Osaimi expects the model to give developers access to diversified funding on better terms, even if construction costs remain tied to material prices, labor, and supply chains. In the short-term, prices in prime locations may rise as investors identify prospects. Over the medium- to long-term, new supply should moderate the pace of increases. “The key question is not whether prices will rise or fall, but whether real estate production will increase,” he says.

The payoff will take time. The private sector is generally faster than the public sector on execution, but real estate expert, trainer, and media commentator Ahmed Al Faqih cautions us that the impact on housing supply “will not be fully reflected in the market for at least six years.”

Does the model sound familiar? The model follows the same fiscal logic running through PIF’s gigaproject recalibration and its recent co-investment frameworks. The government is using an existing asset — in this case, land — to attract private capital instead of funding projects directly. The aim is to speed up delivery while reducing the state’s upfront financial burden, Al Faqih says.

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Aramco Stadium enters the final stretch

Aramco Stadium is entering its final testing phase ahead of its planned November opening, Al Eqtisadiah reports. Operational, safety, technical, and hospitality tests are set to begin in September to prepare the 47k-seat venue in Al Khobar for handover to the Asian Football Confederation in December, ahead of the 2027 AFC Asian Cup.

REMEMBER- PIF-owned Roshn was seeking external investors for Aramco Stadium as part of a capital-recycling strategy, with JPMorgan leading the equity fundraising. Meanwhile, the Kingdom still has 15 stadiums and 132 training venues to build or renovate across five cities before 2034.

NHC lays out its 2030 strategy

NHC sets sights on 600k homes by 2030: The National Housing Company (NHC) plans to double the value of its residential portfolio to more than SAR 400 bn by 2030 from around SAR 200 bn today, while increasing its housing stock to 600k from 300k units, CEO Mohammed Al Buti said. The expansion will rely largely on private-sector partnerships, with NHC developing around 20% of projects directly, 20% with international developers, and the remainder with local developers.

What’s driving the plan? Al Buti expects demand to remain strong, particularly in major cities, with first-time homebuyers continuing to account for the bulk of purchases. The company also expects the Kingdom’s new foreign property ownership regime to support demand and plans to announce projects in areas open to non-Saudi buyers.

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The big story abroad

The latest from the regional war is dominating headlines this morning. Iran has reached an agreement with Oman on a proposal that would give the Islamic Republic control over ships passing through the Strait of Hormuz. While the US has yet to confirm or comment on the news, the development is in line with US President Donald Trump’s recent remarks regarding an imminent agreement to reopen the strait.

IN CONTEXT- The US has repeatedly reiterated that it would not agree to any agreement giving Iran control over Hormuz.

This does not mean the war is over: Iran has reportedly threatened to attack Gulf energy infrastructure if the US launches fresh attacks on its territory.

And over on Wall Street: A wave of cyberattacks targeted major Wall Street financial services firms and ‌money managers, including Point72 Asset Management, Millennium Management, Two Sigma Investments, and Citadel. The voice phishing attacks mark the latest in a series of cybersecurity breaches targeting Wall Street, which have intensified thanks to AI tools.

AI leadership shakeup: Google DeepMind CEO Demis Hassabis has stepped down from his post, one of several people in leadership positions who are leaving the company. The shakeup comes amid growing investor and industry concerns that Google is failing to keep pace with its rivals in the AI sphere.